Brazil's Raizen names Pinheiro Neto and Cleary Gottlieb to try to improve its fortunes

Three people with knowledge of the matter confirmed on Monday that Brazil's Raizen has hired law firms Pinheiro Neto & Cleary Gottlieb to help it strengthen its liquidity and turn its fortunes.

Raizen, the joint venture between Brazilian oil giant Cosan, and London listed oil company Shell has suffered a string of heavy losses in recent quarters and amassed high levels of debt.

In November last year, the company reported that it had a net loss of more than 2.3 billion reals ($443.2 millions) for the second half of the sugar crop for 2025-2026. The?net debt was 53.4 billion reals for the six-month period ended September 30.

Sources confirmed that Raizen had hired advisors to strengthen its liquidity and optimize its capital structure. They added that these preliminary efforts did not amount to a 'potential agreement transaction.

One person said that recent results showed that the capital structure was not sustainable, but added that the company had some time left to turn things around.

After hearing that Raizen had hired advisors, Fitch and S&P Global lowered their ratings to B and CCC+.

S&P stated in a statement that accompanied its decision, "The engagement of financial advisors indicates a high probability of debt restructuring following the weakening of signals from the capitalization and asset sale previously expected."

Cosan, Shell and the company have been evaluating options to inject more capital into this 'troubled' sugar maker. This includes the possibility of bringing new investors in. Representatives for Raizen refused to confirm in an email whether Pinheiro Neto or Cleary Gottlieb were appointed to advise the company. Pinheiro neto and Cleary gottlieb declined to make any comments.

Raizen will report its financial results of the third quarter for the 2025-2026 Sugar Crop later this week.

(source: Reuters)